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As trade volume has exponentially increased over the past decades, we investigated the impact of free trade on relative poverty using data from 123 countries between 1995 and 2018. In this investigation, we used three variables for free trade, reflecting three aspects of free trade, trade openness, trade barrier or trade freedom, and trade policy, and two variables for relative poverty; the income share of the bottom 10% and the bottom 20%. When economic growth, polity and socioeconomic factors are controlled for, we found that (1) trade openness hurts the poor, increasing relative poverty regardless of industrialization, (2) trade freedom benefits the poor, decreasing relative poverty although the poor in industrial countries are hurt by trade freedom, and (3) WTO membership as a proxy for a trade policy is not statistically significant to the poor, although it seems beneficial to the poor. Given these results, we conclude that free trade lowers relative poverty, implying that the income shares of the bottoms 10% and 20% can increase more than by 0.9%p and 1.5%p, respectively, as free trade is promoted. [ABSTRACT FROM AUTHOR]

The article seeks to empirically reconcile two strands of research on the determinants of labour productivity growth: on one hand, the Kaldorian literature emphasises the role of autonomous demand; on the other hand, the Schumpeterian literature underscores the role of innovative investments. Specifically, we test two hypotheses. Firstly, we investigate whether demand shocks, private research intensity, and public R&D expenditure influence labour productivity when these variables are considered simultaneously. Secondly, we examine whether private research intensity is affected by demand shocks and public investments in innovation. We make use of a panel of 12 OECD countries spanning the period from 1986 to 2017. We combine the Local Projection approach with structural shocks estimated through Structural Vector Autoregressive modelling. Findings show a positive impact of government R&D investment, demand shocks, and private research intensity on labour productivity. Additionally, when examining the effects of demand shocks and innovative activities by the public sector on research intensity, the results affirm a positive impact of these variables, thus supporting the presence of the Schmooklerian demand-pull hypothesis. These results remain robust across various model specifications and different measures of labour productivity. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to examine the impact of COVID-19 on inflation in Indonesia. There are two questions in this study: (1) Is there an impact of COVID-19 on inflation in Indonesia? and (2) whether there are differences in the impact of COVID-19 on regional inflation in Indonesia, considering the different intensities associated with COVID-19. Design/methodology/approach: The estimation technique showing the impact of the COVID-19 pandemic on inflation uses the difference-in-differences (DID) method described by Pischke (2008). The core idea of the estimation above is continuous DID using panel data. No province was affected by COVID-19 before 2020:Q1. Once COVID-19 hits the economy, the effects vary from one district to the other. Findings: The authors find that the severity of the COVID-19 pandemic negatively affects inflation – the more severe the pandemic, the lower the inflation. This finding conforms with several studies suggesting higher demand pressures than supply during the pandemic. Compared with supply-side indicators such as production index, demand-side indicators – such as consumer confidence index and real sales index – fell more sharply. Research limitations/implications: In the Introduction section, the authors have added a discussion that indeed the COVID-19 pandemic affects inflation through both the demand- and supply-side shocks. While factors driving regional differences in inflation rate are important research and policy questions, the analysis of these factors is outside the scope of this study. The study focuses on the COVID-19 impact on inflation and whether the pandemic disproportionately affects some regions than the others. Practical implications: This research is important to provide an understanding of the nature of the pandemic on inflation in the context of the Indonesian economy, which is essential to policy formulation, especially for the Central Bank in carrying out the mandate to maintain rupiah stability. This issue is due to the implications of different policy responses between demand- and supply-side shocks. Originality/value: As a novelty in this study and research gap, the authors use a continuous DID method to account for the varying intensity of COVID-19 across the provinces. In particular, the authors use the number of positive cases of COVID-19 per 1,000 population as opposed to just a binary indicator of before-and-during COVID-19 across provinces. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to investigate the extent and trend of corporate social responsibility (CSR) disclosure by UAE listed banks and the impact of corporate governance mechanisms on this disclosure. Design/methodology/approach: Content analysis of banks' annual reports from 2009 to 2019 was applied to investigate the CSR disclosure level by constructing a disclosure index. Panel data regressions were applied to analyze the impact of corporate governance mechanisms on CSR disclosure. Findings: UAE banks show an improving trend in the CSR disclosures. In addition, the board of directors and ownership structure are significantly and positively associated with the CSR disclosures. The results vary across the banking systems. Research limitations/implications: This study considers the extent of the CSR disclosure in UAE banks' annual reports, and future research should consider more industries and communication channels. Practical implications: This study sheds light on the extent of the CSR disclosure of UAE listed banks and assists UAE policymakers in implementing appropriate corporate governance mechanisms. Social implications: The findings provide banks with a better understanding of the benefits of strengthening corporate governance to improve their CSR disclosure. Originality/value: This study contributes to the literature by constructing a more comprehensive disclosure index and examining the impact of corporate governance mechanisms on CSR disclosure by considering both the conventional and Islamic banking systems. [ABSTRACT FROM AUTHOR]

We estimate the effects of the US–China Trade War on Brazilian exports in 2018 and 2019. We analyze the impacts from two perspectives: (i) on total Brazilian exports and (ii) on Brazilian exports of those products on which the United States imposed tariffs against China in the trade war. We used the statistical method of panel data. The results show that Brazil obtained export gains in the first analysis, while its exports were negatively affected in the second analysis. [ABSTRACT FROM AUTHOR]

Purpose: This paper aims to investigate the effect of the economic policy uncertainty (EPU), geopolitical risk (GPR) and climate policy uncertainty (CPU) of USA on Bitcoin volatility from August 2010 to August 2022. Design/methodology/approach: In this paper, the authors have adopted the empirical strategy of Yen and Cheng (2021), who modified volatility model of Wang and Yen (2019), and the authors use an OLS regression with Newey-West error term. Findings: The results using OLS regression with Newey–West error term suggest that the cryptocurrency market could have hedge or safe-haven properties against EPU and geopolitical uncertainty. While the authors find that the CPU has a negative impact on the volatility of the bitcoin market. Hence, the authors expect climate and environmental changes, as well as indiscriminate energy consumption, to play a more important role in increasing Bitcoin price volatility, in the future. Originality/value: This study has two implications. First, to the best of the authors' knowledge, the study is the first to extend the discussion on the effect of dimensions of uncertainty on the volatility of Bitcoin. Second, in contrast to previous studies, this study can be considered as the first to examine the role of climate change in predicting the volatility of bitcoin. This paper contributes to the literature on volatility forecasting of cryptocurrency in two ways. First, the authors discuss volatility forecasting of Bitcoin using the effects of three dimensions of uncertainty of USA (EPU, GPR and CPU). Second, based on the empirical results, the authors show that cryptocurrency can be a good hedging tool against EPU and GPR risk. But the cryptocurrency cannot be a hedging tool against CPU risk, especially with the high risks and climatic changes that threaten the environment. [ABSTRACT FROM AUTHOR]

We studied the causal link between forage condition and food security in northern Kenya and southern Ethiopia and probed the mechanisms through which the effects occur. The study utilized weekly panel survey data collected over a period of 94 weeks (March 2021–December 2022) from drought-prone pastoral regions and estimated two-stage least squares instrumental variables regression to assess causal impacts. We found that an increase in the normalized difference vegetation index (NDVI) – our proxy for forage condition – by 10% significantly reduced the likelihood of a household experiencing food insecurity by 12 percentage points. The main mechanisms through which improved forage condition increased food security were livestock productivity enhancement, reduced prices of basic food commodities (cereals, legumes, and vegetables), and utilization of better coping strategies by households. These findings suggest the need for interventions and initiatives aimed at boosting livestock productivity and reducing vulnerability to drought-induced poor forage conditions. Efforts focused on the monitoring of forage conditions and supporting market development for livestock feed are important for addressing the adverse impacts of drought and deteriorating forage conditions in the horn of Africa. Furthermore, the monitoring of drought conditions and shocks using high-frequency data has the potential for providing early warning and informing anticipatory action. [ABSTRACT FROM AUTHOR]

Twenty five years ago, several authors proposed to describe the forward interest rate curve (FRC) as an elastic string along which idiosyncratic shocks propagate, accounting for the peculiar structure of the return correlation across different maturities. In this paper, we revisit the specific ‘stiff’ elastic string field theory of Baaquie and Bouchaud [Stiff field theory of interest rates and psychological future time. Wilmott Mag., 2004, 2–6] in a way that makes its micro-foundation more transparent. Our model can be interpreted as capturing the effect of market forces that set the rates of nearby tenors in a self-referential fashion. The model is parsimonious and accurately reproduces the whole correlation structure of the FRC over the time period 1994–2023, with an error around 1% and with only one adjustable parameter, the value of which being very stable across the last three decades. The dependence of correlation on time resolution (also called the Epps effect) is also faithfully reproduced within the model and leads to a cross-tenor information propagation time on the order of 30 minutes. Finally, we confirm that the perceived time in interest rate markets is a strongly sub-linear function of real time, as surmised by Baaquie and Bouchaud [Stiff field theory of interest rates and psychological future time. Wilmott Mag., 2004, 2–6]. In fact, our results are fully compatible with hyperbolic discounting, in line with the recent behavioral Finance literature Farmer and Geanakoplos [Hyperbolic Discounting is Rational: Valuing the Far Future with Uncertain Discount Rates, Cowles Foundation Discussion Papers, 2009 (Cowles Foundation for Research in Economics, Yale University)]. [ABSTRACT FROM AUTHOR]

The relationship between health and happiness is well established. However, disability and the burden of disease can also affect the happiness of the local population. We argue that income inequality can worsen the positive effect of health on happiness levels. Using data from 136 economies from 2005 to 2019, we estimate a dynamic panel model that controls the endogeneity and simultaneity issues, and measure the effect of healthy life expectancy on happiness at varying levels of income inequality. We find evidence that healthy life expectancy is significantly and positively associated with happiness, however, at high levels of income inequality, this effect reduces. We shed new perspectives on the costs of income inequality. [ABSTRACT FROM AUTHOR]

Does China pull up its 31 mainland provinces as it converges to the incomes of advanced economies? The conventional method of modelling convergence in the Chinese provinces has been the Barro approach. This paper models convergence through a common factor, interpreted as the rising tides that lift the boats—the growth of China lifts its provinces. We question the conventional (Barro in Q J Econ 106:407–443 1991) definition of convergence. Imposing a common convergence rate across provinces would bias the convergence rate towards zero. We focus on the heterogeneous model where the convergence rate and long-run elasticity to the common factor differ across provinces. The rising tides of growth disproportionately benefit the poorer provinces and lifts the poor provinces more than the wealthier ones. This reveals the effects of transfer from the coastal provinces that developed first to the inner provinces that developed later. [ABSTRACT FROM AUTHOR]

The literature on convergence in per-capita income across countries has not converged on a common concept of convergence. It may be within a country towards its own steady state or between countries. Between country convergence may be absolute convergence to the same steady state; conditional convergence to country specific steady states, functions of observed variables; or club convergence to different steady states. It may be measured by beta convergence; sigma convergence; or the presence of a common trend. This paper surveys the econometric issues involved in estimating the rate of convergence; testing for convergence; and specifying the unobserved steady state. The survey suggests that rather than there being different ways to measure a single concept, convergence, the different measures are measuring different things. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to examine the potential threshold effect in the association between corporate social responsibility (CSR) performance and social reputation. Design/methodology/approach: This study includes an international and cross-sector sample covering 41 countries, nine sectors and 45,395 firm-year observations. It applies a parabolic relationship, rather than linear regressions, between CSR engagement and social reputation via CSR awarding. This implies that CSR performance should increase until a certain point to gain a social reputation but then should decrease after reaching that threshold point considering limited financial resources. Findings: The findings of country-industry-year fixed-effects logistic regressions confirm the threshold effect with an inverted U-shaped relationship between CSR and CSR awarding. More specifically, firms increase their environmental and social engagement until a certain point, and then they reduce it after reaching a social reputation. This finding is confirmed by three dimensions of the environmental pillar (i.e. resource use, emissions and eco-innovation) as well as four dimensions of the social pillar (i.e. workforce, human rights, community and product responsibility). The findings are robust to alternative samples, alternative methodology and endogeneity concerns. Practical implications: The findings of this study have implications for firms about the better allocation of available funds between CSR and operations. The findings could be particularly useful for CSR teams/committees of the firms who formulate CSR policies and how to mobilize firm resources for better social enhancement via environmental and social reputation. Originality/value: This study examines deeper the nature of the association between CSR engagement and social reputation and considers the possibility of an inverted U-shaped relationship between them. The determination of a threshold effect suggests that CSR engagement increases social reputation, but once it reaches a certain point, social reputation will decrease owing to financial resource constraints. [ABSTRACT FROM AUTHOR]

This study empirically examines whether economic globalization reduces (enhances) the level of poverty in the top (bottom) globalized region by controlling economic growth, urbanization, government expenditure, and public expenditure on education. This issue has taken Europe and Central Asia (ECA) as the top (16) and South Asia (SA) as the bottom (7) economic globalized developing region for the empirical analysis for the period of 1991-2020. Two empirical models, non-linear ARDL and PMG-ARDL, estimate the impact of globalization (trade and financial openness) and education on poverty. This study also segregates economic globalization into de jure and de facto to critically analyze the impact on poverty reduction. The long-run results suggest that economic globalization has a negative (positive) effect on poverty in the top (bottom) globalized region. Apart from globalization, primary education is insufficient for reducing poverty in the ECA region, while primary education is enough to reduce poverty in the SA region. After replacing economic globalization with trade and financial openness, the results reveal that more trade openness is difficult for reducing poverty in top globalized developing countries. On the contrary, financial openness reduces (enhances) poverty in the top (bottom) globalized region. Additionally, the impact of de jure and de facto economic globalization are similar throughout the regions. The effects of control variables are mixed in nature. From a policy perspective, the government of these two regions should use education as a weapon to lower poverty vulnerability by improving its quality and giving extensive focus on trade and financial openness to find out the leakage of the financial flows. [ABSTRACT FROM AUTHOR]

This study examines the empirical validity of the Linder hypothesis for India’s service sector exports from 2005 to 2021, focusing on 35 major importing countries. We use a gravity model trade, applying Feasible Generalised Least Squares (FGLS) and two-step system generalised method of moments (GMM), incorporating country- and time-fixed effects. Our results confirm that the Linder hypothesis does not hold for Indian service exports, revealing an increase in trade intensity between countries with dissimilar income levels. The study finds that distance has a positive and significant impact on Indian service exports. Exchange rates have a negative and significant impact on India’s service exports, while the results for the RTA dummy variable are inconclusive. Sharing a common border, a common colony, and a language has a positive and significant effect on Indian service exports.

Access to financial services, which is a component of financial inclusion, enables individuals and businesses to access the funds they need on favorable terms and at low cost, without time and place constraints. In this respect, access to finance is seen as an important tool for economic growth, employment and poverty reduction. The study aims to examine the role of the variables of shadow economy (SE), human development level (HDI), automatic teller machines usage (ATM) and inflation (INF) on access to financial services (AFS) in the member countries of the Organization of Turkic States (OTS). In the study, which covers the period 2004–2021, analyzes were conducted within the framework of the fixed-effect Method of Moment Quantile Regression (MM-QR). According to the results of the study, while the level of HDI and the use of ATMs have a positive effect on AFS, while the SE has a negative effect. Although the INF rate has a negative effect on AFS, this effect could not be confirmed at any quantile level. [ABSTRACT FROM AUTHOR]

This study applies the PSM-DID approach to investigate whether the energy price has been impacted by the Russia-Ukraine war among OECD countries during 1999–2022. Compared with previous studies, we obtain robust and heterogeneous results by considering endogeneity from the perspective of quantitative policy assessment. It concludes the Russia-Ukraine war has significantly raised energy prices, leading to a 9% increase in energy prices in OECD countries. The heterogeneity results show that the Russia-Ukraine war impacted the energy prices of EU and NATO members but not those of non-EU and non-NATO countries. Additionally, only the energy prices in Southern and Western European countries have been significantly increased by the Russia-Ukraine war, in which Southern Europe has been the most affected, rising by 22%. These findings have great practical significance for analyzing the degree of influence of war on fluctuations in energy prices and geopolitical risks in regions. [ABSTRACT FROM AUTHOR]

This study examines the impact of democracy and corruption on the economic growth of Mexico, Indonesia, Nigeria, and Turkey over the 1975–2022 period. Utilizing the Fractional Frequency Flexible Fourier Panel Cointegration and Dynamic Ordinary Least Squares coefficient estimator, two models are employed to test hypotheses regarding economic growth. The findings reveal that democracy plays an upgrading role in the economic growth of all MINT countries, while the effect of corruption varies. In Indonesia and Mexico, corruption has a positive impact on growth, reflecting the effect of democracy, whereas Nigeria and Turkey experience a negative impact. The democracy model supports the compatibility hypothesis for all countries, asserting a positive link between democracy and economic growth. However, the corruption model yields divergent results, with Nigeria and Turkey aligning with the “grease in the wheels” hypothesis, implying that corruption can facilitate economic growth by bypassing bureaucratic obstacles, while Indonesia and Mexico support the "sand in the wheels" hypothesis, indicating that corruption hinders economic growth. This highlights the need for governments to strengthen institutions through transparency, accountability, and credibility via robust oversight and governance mechanisms. Therefore, democratic advancement, streamlined bureaucracy, and anti-corruption policies are imperative for sustainable economic growth and welfare. [ABSTRACT FROM AUTHOR]

The ISO 14001 voluntary standard is a blueprint for improving an organization’s environmental record and one of many tools available to address our planet’s ecological challenges. Since its introduction in 1996, adoption of the standard has surged globally, despite its significant costs. We examine the economic benefits to firms of being ISO 14001-certified by exploring whether certification results in a more efficient production process, using a panel of South Korean manufacturing firms and a stochastic frontier model with endogeneity. We find evidence that ISO 14001 certification significantly improves technical efficiency among high-polluting industries, increasing output by an average of 2.7%. This research enriches the empirical literature on voluntary environmental programs by showing that the standard improves technical efficiency among manufacturing firms. This may account for the popularity of the standard in South Korea, a global leader in manufacturing and exports, where its effects on efficiency have not been empirically examined. [ABSTRACT FROM AUTHOR]

In this study, we examine the impact of fiscal rules on debt affordability across an extensive sample of developed and emerging market economies, employing a panel data model that accommodates weakly exogenous regressors and effectively addresses cross-section dependence. Our findings consistently reveal a positive and significant effect of fiscal rule implementation on public debt affordability, regardless of the various model specifications employed. Notably, the effect of fiscal rules is more pronounced in emerging market economies, where the implementation of any fiscal rule leads to improved debt affordability. In contrast, for developed countries, the benefits are realized primarily through the adoption of high-quality fiscal rules. These results provide robust evidence of the efficacy of fiscal rules in enhancing debt management and fiscal sustainability, particularly in emerging market economies. The findings underscore the importance of prudent fiscal policy in achieving favorable debt affordability levels, offering valuable insights for policymakers seeking to bolster fiscal resilience and optimize debt management strategies in both developed and emerging economies. [ABSTRACT FROM AUTHOR]

The resource-based view, signaling, and behavioral perspectives focus on different theoretical mechanisms through which human capital and the behavioral characteristics of nascent entrepreneurs, in combination with insider and outsider financing, may influence the emergence of new ventures. This work tests the relative explanatory power of these different theoretical perspectives. We estimate a mediation model to disentangle the direct effect of nascent entrepreneur personal characteristics on new firm creation from their indirect effects, mediated by the amount of insider financing committed to new ventures and access to greater outsider financing. Our empirical results are based on data from the Panel Study of Entrepreneurial Dynamics (PSED II) and improve our understanding of the drivers of new firm creation and their underlying mechanisms. Our findings support the resource-based view and the behavioral perspective in our sample of nascent entrepreneurs, but do not provide evidence of the signaling perspective. [ABSTRACT FROM AUTHOR]

Despite insurance contributions to economic growth, the intervening role of structural transformation on the insurance-growth nexus remains scarce, leaving a gap in the literature. Motivated by the 2030 Sustainable Development Agenda, which envisages higher structural transformation, financial development and economic progress, this study examines the threshold effects and the joint impact of insurance and structural transformation on economic growth in Africa. The study employed the generalised method of moments and dynamic panel threshold estimations on 38 countries covering 2008 to 2020. The following findings emerge: First, insurance and structural transformation promote economic growth. Second, the results indicate that structural transformation enhances the impact of insurance on economic growth. This suggests that structural transformation matters in driving insurance market development, ultimately promoting economic growth. Third, the empirical evidence further reveals nonlinearities in the relationship and presents that a high level of insurance penetration stimulates growth and vice versa. More so, the synergistic effect of insurance and structural transformation on economic growth is more substantial at higher threshold levels. This implies that though insurance spurs economic growth, its impact is more effective through the intervening role of a strong structural transformation. Therefore, this study calls for government intervention and policies to improve structural transformations and form insurance synergies to promote growth.

It clarifies the influence mechanism of controlling shareholders' equity pledges, margin trading and securities lending, and stock price crash risk from the perspective of corporate governance, etc. This paper establishes a main and interaction effect regression model to empirically test the impact mechanism of controlling shareholders' equity pledge on stock price crash risk and the moderating effect of margin trading and securities lending in the process of this impact based on the measures of stock price crash risk, controlling shareholders' equity pledge level, as well as margin trading and securities lending transaction size, using China's A-share listed companies from 2010 to 2020 as the sample. It finds that: (i) The higher the controlling shareholder's equity pledge ratio of listed companies, the lower the stock price crash risk. (ii) There is no significant effect of margin trading and securities lending transactions on stock price crash risk. (iii) Securities lending transactions have a positive moderating effect in the impact of controlling shareholders' equity pledges on stock price crash risk, but the moderating effect of margin trading transactions is insignificant.

Balancing economic growth and carbon emissions is crucial for managing irreversible climate change. We investigate the impact of national ESG performance on greenhouse gas emissions and explores the role of environmental policy stringency on this impact. Based on the panel data of 41 countries from 1990 to 2020, we found that improving national ESG performance effectively suppressed greenhouse gas emissions, and improving environmental performance played a decisive role. Improving social performance may increase greenhouse gas emissions, but governance performance has no significant impact. Environmental policy stringency has strengthened the suppression of greenhouse gas emissions by ESG performance, and this effect is more evident in OECD countries. Heterogeneity analysis shows that environmental policy stringency reverses the stimulus of social performance on emissions, and its joint effect with governance performance reduces greenhouse gas emissions. Our findings provide empirical evidence for understanding the relationship between national ESG performance and greenhouse gas emissions and provide valuable insights for more effective environmental policymaking.